Wednesday, July 18, 2018

"Both Venal And Paternalistic"

An attorney's misuse of the funds of his mother's estate to the detriment of his sister drew disbarment from the New York Appellate Division for the Second Judicial Department.

The attorney's sister sued him in Connecticut

The Superior Court rendered a judgment in January 2012 (hereinafter the January 2012 judgment) against the respondent in the principal sum of $108,902, plus prejudgment interest to the date of the judgment in the sum of $46,991 for a judgment in the total sum of $155,893. The respondent was also found liable for postjudgment interest pursuant to statute. To date, the respondent has failed to pay or satisfy the January 2012 judgment.

The respondent and his wife appealed the January 2012 judgment, and “the subsequent judgments of the trial court denying their motions to open and reargue the [January2012] judgment.” The Appellate Court of Connecticut affirmed the judgments (see Baillergeau v McMillan, 143 Conn App 745, 72 A3d 70).


The respondent asks that the Court impose a light sanction based on the following mitigating factors: he is remorseful and accepts responsibility for the harm he caused Baillergeau; the misuse of funds is an isolated occurrence in a relatively unblemished 40-year legal career; he is paying Baillergeau $1,000 per month, not $500, for a total amount, to date, of $50,000; he has had his wife reconvey to him his interest in the 716 house; the dispute is simply a “family affair,” and his motives, while paternalistic, were not venal; he has cooperated with the Grievance Committee’s investigation; he serves as an elder in his church and is a member of its governing board; and he enjoys a reputation in the community as a person of honesty and integrity.

As far as mitigation, the Special Referee noted that the respondent was remorseful and had not denied culpability and responsibility, although she found it inconsistent for him to claim, on the one hand, that he lacked knowledge of the rules governing escrow accounts, yet, at the same time, acted on knowledge that escrow funds are immune from collection. The Special Referee duly noted the letters submitted in support of the respondent’s character, in particular, his financial acumen, except that she found it difficult to resolve the inconsistency between the respondent’s financial acumen and his inability to produce records of deposits and withdrawals...

Notwithstanding the mitigating factors present in this case, we find that the respondent’s misconduct is grave and warrants a severe sanction. The respondent engaged in a course of conduct to deprive Baillergeau of her rightful share of her inheritance. In so doing, he deceived Baillergeau, filed a false statement with the court, entered into a fraudulent conveyance, and misused his escrow account to shield funds from Baillergeau and other judgment creditors. Not only did he deprive Baillergeau of the share of the proceeds from the sale of their mother’s home, but he converted the funds for his own use. While acknowledging his obligation to repay Baillergeau, the respondent is paying her only what he receives in monthly social security payments, a payment level so low that it is unlikely that Baillergeau will live long enough to see the debt satisfied. The respondent’s motives were both venal and paternalistic. He acted in his own self interest and clearly took advantage of Baillergeau and her lack of education. He violated his fiduciary duty as administrator of Kathryn’s estate. Beyond the respondent’s misconduct surrounding the handling of Kathryn’s estate, the respondent ignored wholesale the rules governing attorney trust accounts, his most egregious violation being the use of his escrow account as a shield against Baillergeau as a judgment creditor and other creditors as well. The respondent’s feigned ignorance of the rules is belied by his possession of knowledge sufficient to use his escrow account as a shield. The respondent’s ignorance of the rules is inexplicable and inexcusable given the fact that he is no novice and is a certified public accountant.

Under the totality of the circumstances, we find that a disbarment is warranted.

The attorney was collaterally estopped from defending several allegations based on a Connect icut judgment. (Mike Frisch)

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